Dismissed

Murali Medicals v. Catholic Syrian Bank Limited

DRT21 Oct 2025SA/663/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a securitization application by Murali Medicals and guarantors challenging possession proceedings and interest charges against CSB Bank, finding no illegality in the seizure of collateral.

What did the court decide?

The secuiritization application was dismissed with no costs.

What the court decided

Murali Medicals versus Catholic Syrian Bank Limited — Banking and Recovery | DRT (2025)

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

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DATED THIS 21^st DAY OF OCTOBER, 2025

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PRESENT: Su. WILLYAHM, B.Sc., M.L. [DISTRICT JUDGE - Retd] PRESIDING OFFICER

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S.A No. 663 of 2023

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Between

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Murali Medicals, rep. by its

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Managing Partner Room No.1, Corporation Rest House Building, Medical College P.O., Kozhikode – 673 008.

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Bhargavi C.R., Eranezhath Vengali, Keeran Kuzhi Parambu, Medical College P.O., Kozhikode -673 008.

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Binesh EVR, Eranezhath Vengali, Keeran Kuzhi Parambu, Medical College P.O., Kozhikode -673 008.

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Roshina, Eranezhath Vengali, Keeran Kuzhi Parambu, Medical College P.O., Kozhikode -673 008.

--- Applicants

SA No.663 of 2023

And

The CSB Bank Limited, Rep by its Authorized Officer, CSB Bank Limited, Zonal Office, North Kerala Zone, Ground Floor, C.M. Mathew & Brothers Arcade, Chakkoratukulam, Eranjippalam P.O., Kozhikode – 673 006.

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--- Defendant

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This Securitization Application coming on 12.08.2025 for final hearing before me in the presence of Ms. Sabitha C.A., Counsel appearing for the Applicants and Mr. Nelson Joseph, Counsel appearing for the Defendant and upon hearing arguments of learned Counsels for both the parties and upon perusing the material on records, this Tribunal delivered the following:

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O R D E R

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This Securitisation Application was filed on 27.10.2023 seeking to set aside Annexure-A7 possession notice and Annexure-A11 notice issued by the Advocate Commissioner and to declare that the amount sought to be recovered is not payable but exorbitant and to declare that loan accounts was not Non-Performing Asset on the date of issuance of the demand notice and to direct the defendant to pay compensation and cost of the applicants.

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The 1^st applicant availed cash credit facility of Rs.45 lakhs and GECL loan of Rs.67,740/- from the defendant bank. The applicants 2 to 4 stood as guarantors for the aforesaid credit facilities. Further the applicants 2 and 3 created equitable mortgage by deposit of their title deeds over the immovable properties admeasuring an extent of 5.463 Ares with residential building thereon comprised in Re.Sy.No.51/1 of Chelavoor Village, Kozhikode Taluk, Kozhikode District as the collateral security for the availment of the aforesaid credit facility.

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Due to default in repayment of the outstanding loan due, the loan accounts of the applicant came to be classified as NonPerforming Asset on 17.04.2023. Annexure A5 demand notice dated 15.05.2023 was issued to the applicants calling upon them to pay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. The applicants neither sent any objection/representation to the demand notice nor did they clear off their liability due to the defendant bank.

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Page 2 of 5

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SA No.663 of 2023

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Therefore, Annexure A7 possession notice dated 19.10.2023 was issued for symbolically taking physical possession of the secured asset. Subsequently, the defendant approached the Chief Judicial Magistrate Court, Kozhikode and filed Annexure A8 application and Annexure A9 affidavit under Section 14(1) of the SARFAESI Act, 2002, Annexure A10 order dated 22.11.2023 came to be passed in CMP No. 2433/2023 appointing advocate commissioner to take physical possession of the secured asset. The advocate commissioner issued Annexure A12 notice to the applicants informing them that he would take physical possession of the secured asset on 24.01.2024.

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The counsel appearing for the applicants submitted that issuance of Annexure A6 loan renewal sanction letter after issuance of Annexure A5 demand notice evidences that the loan accounts could not have turned into Non-Performing Asset and that Annexure A1 and Annexure A2 Statement of Accounts are mere extracts of the statements and that the interest charged is exorbitant and that the defendant failed to comply with the statutory requirements of clauses (i) to (ix) to the proviso of Section 14(1) of the SARFAESI Act, 2002 and that therefore, the SA may be allowed as prayed for.

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The counsel appearing for the defendants submitted that Annexure A6 was issued to the applicants for renewal of credit facility subject to compliance of terms and conditions stipulated in the letter and that the said terms and conditions was not complied with by the applicants and that loan account of the applicants had become NonPerforming Asset prior to issuance of Annexure A6 and that interest has been charged as per RBI guidelines and the terms of the contract and that secured interest has been registered with Central Registry and that Annexure A8 application and Annexure A9 affidavit were filed before the Chief Judicial Magistrate Court, Kozhikode only after compliance of the statutory requirements stipulated under Section 14(1) of the SARFAESI Act, 2002 and that the learned Chief Judicial Magistrate, Kozhikode after having verified the affidavit and the supporting documents passed order for taking physical possession of the secured asset and that therefore, SA may be dismissed with cost to the defendants.

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It cannot be disputed that Annexure A6 letter of request for renewal of credit facility was issued after classification of the loan accounts of the applicants as Non-Performing Asset in order to enable the applicants to meet the working capital requirements. Hence, the issuance of Annexure A6 cannot be construed that loan accounts of the applicants did not become Non-Performing Asset.

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Page 3 of 5

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SA No.663 of 2023

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The applicants have not specifically averred in the SA as to how the interest charged is exorbitant. The applicants having aggrieved to the terms and conditions of the loan agreement are estopped from contending now that the rate of interest charged is exorbitant.

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A perusal of Annexure A9 affidavit shows that the details such as availment of credit facilities by the applicant from the defendant bank upon creation of equitable mortgage over the immovable properties of the applicants 2 and 3 by deposit of title deeds, details of the secured assets, default in repayment of the outstanding loan due, classification of the loan accounts as Non-Performing Asset, issuance of demand notice dated 15.05.2023, failure of the defendants to discharge their liability even after receipt of the demand notice, the total outstanding amount as on 15.11.2023, secured asset be free of any tenancy hold right were furnished. Hence, it is evident that there is substantial compliance of the statutory requirements stipulated under clauses (i) to (ix) to the proviso of SARFAESI Act, 2002.

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A perusal of Annexure A10 order shows that the learned Chief Judicial Magistrate, Kozhikode after having perused the contents of the affidavit and the documents filed in support of the affidavit and having satisfied over the same, passed order appointing advocate commissioner to take physical possession of the secured asset. This Tribunal does not find any infirmity or illegality in the above order.

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This Tribunal having considered the materials placed before it and the submissions of both sides’ counsels comes to a conclusion that applicants have failed to prove their case so as to get the reliefs sought for in the SA.

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In the result, SA No.663/2023 stands dismissed. No costs.

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Dictated to Steno, taken down, transcribed, typed by him, corrected and

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pronounced by me in the open court on this the 21^st day of October, 2025.

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(Su. WILLYAHM) PRESIDING OFFICER

al/

Page 4 of 5

SA No.663 of 2023

List of documents filed by the Applicants along with the S.A.

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Sl. No.	Date	Particulars
1.	---	True copy of extract of the statement of account pertains to cash credit loan account No.0127-03465201-710501.	Annexure-A1
2.	---	True copy of extract of the statement of account pertains to cash credit loan account No.0127-03465201-664601	Annexure-A2
3.	12.02.2022	True copy of the complaint submitted before the Hon’ble Prime Minister of India.	Annexure-A3
4.	02.03.2022	Copy of the reply to the complaint submitted before the Hon’ble Prime Minister of India.	Annexure-A4
5.	15.05.2023	Copy of the demand notice issued to the applicants.	Annexure-A5
6.	---	True copy of the request for renewal of credit facility sanction letterattached to the e-mail.	Annexure-A6
7.	17.10.2023	Copy of screenshot evidencing the date of communicationofthe e-mail.	Annexure-A6a
8.	19.10.2023	Copy of the possession notice issued by the defendant to the applicants.	Annexure-A7
9.	17.11.2023	Copy of the application filed before the Chief Judicial Magistrate Court, Kozhikode in CMP No.2433/2023.	Annexure-A8
10.	17.11.2023	Copy of the affidavit filed before the Chief Judicial Magistrate Court, Kozhikode in CMP No.2433/2023.	Annexure-A9
11.	22.11.2023	True copy of the order of the Chief Judicial Magistrate Court, Kozhikode in CMP No.2433/2023.	Annexure-A10
12.	08.12.2023	True copy of the order of the Chief Judicial Magistrate Court, Kozhikode in CMP No.2589/2023inCMP No.2433/2023.	Annexure-A11
13.	05.01.2024	Copy of the notice issued by the Advocate Commissioner	Annexure-A12
14.	21.07.2020	Copy of the sanction letter pertains to GECL loan	Annexure-A13

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(Su. WILLYAHM) PRESIDING OFFICER

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al/-

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Page 5 of 5

Murali Medicals v. Catholic Syrian Bank Limited

Case brief

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Murali Medicals v. Catholic Syrian Bank Limited

Case brief

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